Question

Sol:-

A) In Autarky,a nation can only achieve those points which lie on it's PPF curve or those points which lie inside it.

For Golikia,the points attainable are :

A and B

b) When both nations decides to trade,the new world ppf curve will cover the following grey points under the curve which will become attainabe now-

Points X,Y and Z

c) When both nations engage in trade and desire the sasme post trade consumption bundle then Golikia will export video game consoles as it has a lower opportunity cost in production of video game consoles.

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